AIM Rule 26

As an AIM-listed company, the Company is not required to comply with any specific requirements for corporate governance procedures. Nevertheless, in considering its own arrangements for governance, the Company has regard, so far as is practicable and appropriate for a company of its size and nature, to the provisions of the UK Corporate Governance Code, and to the recommendations of the Quoted Companies Alliance (QCA). The key elements of the Company’s corporate governance arrangements are described below.

The Board conducts an annual review of the Company’s Corporate Governance Code to ensure it is reflective of, amongst other things; any recent legislative changes, the UK Corporate Governance Code, the recommendations of the Quoted Companies Alliance and the economic and social environment within which the Company operates.

A key element of the Company’s Corporate Governance strategy was the creation of the audit and remuneration committees which each fulfil an important role as an independent check and balance to the executive decision making process. Each of these committees are composed of, and chaired by, the independent non-executive directors of the Company.

The Audit Committee’s role is to assist the Board with the discharge of its responsibilities in relation to financial reporting including reviewing the Group’s Annual Report and Accounts and half-year financial statements, reviewing and monitoring the scope of the annual audit and the extent of non-audit work undertaken by external auditor, advising on the appointment of the external auditor and reviewing the effectiveness of the internal audit function, internal controls, whistleblowing and fraud systems in place within the Group.

The Audit Committee meets at least three times in each financial year and has unrestricted access to the Group’s external auditor.

During the year the Audit Committee comprised Graeme Bissett (Chair), Miriam Greenwood and Willie MacDiarmid. Meetings are also attended, by invitation, by the Chief Financial Officer and Head of Internal Audit.

The Remuneration Committee will review the performance of the executive directors and make recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee will also make recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. The Remuneration Committee will meet as and when necessary. In exercising this role, the Directors shall have regard to the recommendations put forward in the QCA Guidelines and, where appropriate, the Corporate Governance Code guidelines. The Remuneration Committee comprises of Willie MacDiarmid, Miriam Greenwood (as Chairperson) and Graeme Bisset.

The Nomination Committee is chaired by Willie MacDiarmid and also comprises Alan Foy, Miriam Greenwood and Graeme Bisset. The Nomination Committee considers the selection and re-appointment of Directors. It identifies and nominates candidates to fill Board vacancies and regularly reviews the structure, size and composition (including the skills, knowledge and experience) of the Board and makes recommendations to the Board with regard to any changes.

SMS plc’s issued share capital is 112,495,800 ordinary shares of 1p each.

There are no restrictions on the transfer of the Company’s shares.

There are no other exchanges or trading platforms on which SMS Plc securities are trading.

SMS Plc is subject to the UK City Code on Takeovers and Mergers.

Copy of Nominated Advisor and Broker - Scotland
Cenkos Securities Plc
66 Hanover Street
Edinburgh
EH2 1EL

Nominated Advisor and Broker - England
Cenkos Securities Plc
6.7.8 Tokenhouse Yard
London
EC2R 7AS

Auditors
Ernst & Young LLP
G1 Building
5 George Square
Glasgow
G2 1DY

Company Solicitor
CMS Cameron McKenna Nabarro Olswang LLP
1 West Regent Street
Glasgow
G2 1AP

Financial PR and Investor Relations
Kreab
90 Long Acre
London
WC2E 9RA

Registrars
Computershare Investor Services Plc
The Pavilions
Bridgewater Road
Bristol
BS99 6ZZ